CCL releases Q423 Earnings Report

[BermudaBound2014]

I just listened to the conference call released by CCL on fourth quarter earnings. I'm sure a transcript will be available for those who missed this and maybe interested.

 

The picture painted is quite positive (but note that the 'Beards' are exceptional salesmen). I'm skeptical regarding the cruise industry as a whole post covid. No other industry took as hard of a hit.  However; given the current forward looking predictions, CCL will recover from covid quite nicely.

 

I haven't had time to dig thru the numbers but on quick glance, I believe the stock took a nice jump this morning because CCL beat the estimates. They still lost money, just not as much as was expected. 

 

https://www.carnivalcorp.com/news-releases/news-release-details/carnival-corporation-plc-reports-record-fourth-quarter-and-1

 

 

[kazu]

Thanks for sharing 👍 

[HappyInVan]

1 hour ago, BermudaBound2014 said:

However; given the current forward looking predictions, CCL will recover from covid quite nicely.

 

I haven't had time to dig thru the numbers but on quick glance, I believe the stock took a nice jump this morning because CCL beat the estimates. They still lost money, just not as much as was expected. 

 

 

Grasp! They still lost money despite the current high prices???

 

I guess that they are recovering nicely.

[BermudaBound2014]

22 minutes ago, HappyInVan said:

 

Grasp! They still lost money despite the current high prices???

 

I guess that they are recovering nicely.

 

Of course they still lost money. Everyone predicted that, including CCL.

 

All three cruise lines are still bleeding. But they no longer need a tourniquet to stop the flow, a traditional band-aid seems to be doing the trick.

 

PS: I think that overall, HAL is offering some of the most competitive pricing in the industry right now, especially on the unique itineraries.

 

 

Edited December 21, 2023 by BermudaBound2014

[CruiserBruce]

Must be overdue to start building new ships...

[OlsSalt]

2 hours ago, HappyInVan said:

 

Grasp! They still lost money despite the current high prices???

 

I guess that they are recovering nicely.

 

Hard to pay off the  $10 billion dollar of loans required to stay afloat during the "covid" shutdown, in just one cruise season. But they are inching back to the old "normal". Always wish we could see a breakdown for profit and loss by internal brand, in the CCL consolidated reports.  Who is carrying their weight, who is subsidizing the laggards? 

 

Good news - more passengers are reporting more of the "old HAL" is coming back after the more severe post-"covid" start-up days.

 

Complaints about cabin delivery of 100 day medallions instead of the former special ceremony seems to be the more prevalent  HAL "cut back" these days. Rest assured, HAL does love their returning passengers. Be patient, they will honor you again for sure. You are their future. As we higher medallion holders start falling off our perches. HAL is worth waiting for.

[CruiserBruce]

49 minutes ago, OlsSalt said:

 

Hard to pay off the  $10 billion dollar of loans required to stay afloat during the "covid" shutdown, in just one cruise season. But they are inching back to the old "normal". Always wish we could see a breakdown for profit and loss by internal brand, in the CCL consolidated reports.  Who is carrying their weight, who is subsidizing the laggards? 

 

Good news - more passengers are reporting more of the "old HAL" is coming back after the more severe post-"covid" start-up days.

 

Complaints about cabin delivery of 100 day medallions instead of the former special ceremony seems to be the more prevalent  HAL "cut back" these days. Rest assured, HAL does love their returning passengers. Be patient, they will honor you again for sure. You are their future. As we higher medallion holders start falling off our perches. HAL is worth waiting for.

I believe the debt was actually something like $32 billion.

[OlsSalt]

12 minutes ago, CruiserBruce said:

I believe the debt was actually something like $32 billion.

 

Ouch, with interest or due to capital needs?

[CruiserBruce]

4 minutes ago, OlsSalt said:

 

Ouch, with interest or due to capital needs?

I believe the total acquired was 32 billion, between various loans and sales of additional stock. Last I heard...its been a couple months...they had paid back about 20%.

 

Not sure if the sales of old ships was on top of that...as revenue, debt that didn't have to be incurred.

[ROUS]

It's not a healthy industry these days.  

[BermudaBound2014]

3 hours ago, OlsSalt said:

 

Hard to pay off the  $10 billion dollar of loans required to stay afloat during the "covid" shutdown, in just one cruise season.

 

 

They wish it was only 10 Billion in debt. The Saudies' alone bailed out CCL at the start of the pandemic with over 7B making them an 8% owner in the company. Many people believe that without the Saudi Sovereignty , CCL was toast by the fall of 2020 as they were the most fragile.

 

CCL started the pandemic with 11B in debt. I believe CCL maxed out debt just over 35 Billion in Q123. Taking on about 24B in debt over the pandemic. They hold over 225% higher debt when compared to 5 years ago. They carry close to twice the debt much as the competition (NCL 12B and RCL at 18B). But, CCL is much larger so that is to be expected. 

 

As of today the debt is still just over 30.5Billion which means more than 10% payoff this year. RCL paid back about 8% of it's debt and it doesn't look like NCL has paid back much at all (but admittedly I did not follow the last NCL quarterly release).

 

That rate of payback is actually impressive, but they will need to be able to keep up that pace given the debt maturity in the next 5 years. Of course, they can always borrow more money. There is some truth to 'too big to fail'. Don't get me wrong, IMO they aren't out of the hole by a longshot (as evidenced by the inability to break loose of $19.5),  but if their future predictions come to fruition, things are certainly looking up. 

 

https://seekingalpha.com/news/4049117-carnival-in-charts-company-continues-to-reduce-overall-debt

 

 

If interested, I think this is a nice summary for most people:

https://markets.businessinsider.com/news/stocks/carnival-corporation-plc-reports-record-fourth-quarter-and-full-year-revenues-with-continued-strong-bookings-and-earnings-momentum-1032919369

 

 

 

Edited December 22, 2023 by BermudaBound2014

[Gail & Marty sailing away]

5 minutes ago, BermudaBound2014 said:

 

 

They wish it was 10 Billion. The Saudies' alone bailed out CCL at the start of the pandemic with over 7B making them an 8% owner in the company. Many people believe that without the Saudi Sovereignty , CCL was toast by the fall of 2020 as they were the most fragile.

 

CCL started the pandemic with 11B in debt. I believe CCL maxed out debt just over 35 Billion in Q123. Taking on about 24B in debt over the pandemic. They hold just over 225% higher debt when compared to 5 years ago. They carry close to twice the debt much as the competition (NCL 12B and RCL at 18B). But, CCL is much larger so that is to be expected. 

 

As of today the debt is still just over 30.5Billion which means more than 10% payoff this year. RCL paid back about 8% of it's debt and it doesn't look like NCL has paid back much at all (but admittedly I did not follow the last NCL quarterly release).

 

That rate of payback is actually impressive, but they will need to be able to keep up that pace given the debt maturity in the next 5 years. Of course, they can always borrow more money. There is some truth to 'too big to fail'. Don't get me wrong, IMO they aren't out of the hole by a longshot (as evidenced by the inability to break loose of $19.5),  but if their future predictions come to fruition, things are certainly looking up. 

 

https://seekingalpha.com/news/4049117-carnival-in-charts-company-continues-to-reduce-overall-debt

 

 

If interested, I think this is a nice summary for most people:

https://markets.businessinsider.com/news/stocks/carnival-corporation-plc-reports-record-fourth-quarter-and-full-year-revenues-with-continued-strong-bookings-and-earnings-momentum-1032919369

 

 

 

Thanks for sharing.

[BermudaBound2014]

3 hours ago, OlsSalt said:

Always wish we could see a breakdown for profit and loss by internal brand, in the CCL consolidated reports.  Who is carrying their weight, who is subsidizing the laggards? 

 

Amen.

[TRLD]

5 hours ago, BermudaBound2014 said:

 

Of course they still lost money. Everyone predicted that, including CCL.

 

All three cruise lines are still bleeding. But they no longer need a tourniquet to stop the flow, a traditional band-aid seems to be doing the trick.

 

PS: I think that overall, HAL is offering some of the most competitive pricing in the industry right now, especially on the unique itineraries.

 

 

While they still technically lost money, they were cash flow positive, with depreciation pushing them into the red. At this point, unless there is another black swan event, they should be able to deal with the debt. The biggest remaining question is how soon they will be in good enough shape to start placing new ship orders for their brands. I expect we should see some new orders being placed in the 26-27 timeframe.

[HappyInVan]

30 minutes ago, TRLD said:

While they still technically lost money, they were cash flow positive, with depreciation pushing them into the red. At this point, unless there is another black swan event, they should be able to deal with the debt. 

 

The problem are the prices of the cruise fare. Having exploited the potential of selling HIA for extra income, CCL still needs 20% higher fares. Without the right prices, no reason to order new ships or upgrade old ships.

[OlsSalt]

Hard to order new ships while the port availability situation has become such a rapidly changing consideration.  

 

Build large and limit your ports; build small and have to charge more per passenger but have better port choices.  Pretend you are floating hotel,  so ports don't matter? Pretend you can still survive on the no frills traveller, who just wants a bed and to be fed.

 

HAL did find the sweet spot between the two ......... for a while. 

 

 

[TRLD]

1 hour ago, HappyInVan said:

 

The problem are the prices of the cruise fare. Having exploited the potential of selling HIA for extra income, CCL still needs 20% higher fares. Without the right prices, no reason to order new ships or upgrade old ships.

They and other cruise lines seem to being successful in pushing fares. They are all following the land based hotels and are narrowing the gap in pricing. Pre Covid that gap was about 15%. Early in the restart as hotels raised prices while cruise lines focused on filling ship that gap increased to 40 to 45%. Last year all 3 major cruise groups indicated their intent to narrow the gap back to historic norm in 2024. based upon bookings it appears thst they are making progress.

 

2023 was focused on filling ships and increasing on board spend  2024 is focusing on fare increases. wmWill be interesting to see how much they close the gap, but CCL comments indicate that fares paid in 2024 are materially higher that 2023.

[Crew News]

The Carnival Cruise Lines CEO was on the Clamon Countdown show on Fox Business Channel today.  He reported two thirds of all staterooms for 2024 are already sold and said that full profitability will occur in 2026 as debt is significantly reduced.

[HappyInVan]

10 hours ago, Crew News said:

The Carnival Cruise Lines CEO was on the Clamon Countdown show on Fox Business Channel today.  He reported two thirds of all staterooms for 2024 are already sold... 

 

I suppose that they can always launch another $1-deposit offer.

[mcrcruiser]

23 hours ago, BermudaBound2014 said:

I just listened to the conference call released by CCL on fourth quarter earnings. I'm sure a transcript will be available for those who missed this and maybe interested.

 

The picture painted is quite positive (but note that the 'Beards' are exceptional salesmen). I'm skeptical regarding the cruise industry as a whole post covid. No other industry took as hard of a hit.  However; given the current forward looking predictions, CCL will recover from covid quite nicely.

 

I haven't had time to dig thru the numbers but on quick glance, I believe the stock took a nice jump this morning because CCL beat the estimates. They still lost money, just not as much as was expected. 

 

https://www.carnivalcorp.com/news-releases/news-release-details/carnival-corporation-plc-reports-record-fourth-quarter-and-1

 

 

yes this report  pushed up the stock price .sold near the high  . when it drops back will trade again 

Edited December 22, 2023 by mcrcruiser

[YXU AC*SE]

On 12/21/2023 at 11:38 AM, BermudaBound2014 said:

I'm sure a transcript will be available for those who missed this and maybe interested.

 

Ask and ye shall receive. 

https://www.fool.com/earnings/call-transcripts/2023/12/21/carnival-corp-ccl-q4-2023-earnings-call-transcript/

 

Scott. 

[TRLD]

I like looking at the revenue and expense in terms of per passenger per day as a means of comparing different periods and get a feel for what the company is doing.

 

As far as Revenue per passenger per day

                                    Q4 2023   Full Year 2023            Q4 2019    Full Year 2019

Passenger Fares           148.73          153.91                    135.33       151.09

Onboard                         79.29             82.34                      64.83         67.81

 

As far as some expense categories per passenger per day

Food                             14.19              14.61                      11.17         11.60

Fuel                              23.52              22.40                      15.27         16.73

total operational         153.77             156.64                   131.19        138.26

 

Basically passenger fares per passenger day for this most recent quarter and fiscal year are exceed fares in 2019 and are expected to be increasing in future reporting periods. Onboard spending  is now a little over 22% higher per passenger day then similar periods in 2019.  Clearly CCL lines have been successful in increasing on board spending amounts while  getting fares back to pre-shutdown levels.

 

Expenses are certainly higher with food spend around 25-27% higher than 2019.  However, it is a bit lower than 2022 which most likely indicates that they have been able to rebuild their supply chains.

 

Fuel is up over 30% for 2023 compared to 2019 with Q4 being over 50% higher.

 

Total operational costs are up  17% for Q4 and 13% for the entire 2023 fiscal year compared to 2019.  However total operational costs are down compared to 2022 largely do to better efficiency with supply chains rebuilt and ships sailing at a higher occupancy level.

 

Occupancy was 101% in the most recent quarter, still significantly lower compared to 107.8% is the same quarter in 2019.

 

 

Edited December 22, 2023 by TRLD

[TRLD]

9 hours ago, HappyInVan said:

 

I suppose that they can always launch another $1-deposit offer.

Certainly, why wouldn't they if it has been successful in the past.  Keep in mind that they have all of the analytics we do not on how many people take advantage of the offer, the cancellations rates, how many reprice their cruise before final payment, how many complete the booking and sale, the final revenue from such bookings, etc.

 

They also know the impact of such bookings on their pricing models which used booking numbers on each cruise to price open cabins.

 

Bottom line while people may ridicule such offers, without having access to the data that the cruise lines has, the cruise lines that have all of that information available do see value and economic benefit from them or they would not repeat them.

 

 

[TRLD]

8 minutes ago, TRLD said:

I like looking at the revenue and expense in terms of per passenger per day as a means of comparing different periods and get a feel for what the company is doing.

 

As far as Revenue per passenger per day

                                    Q4 2023   Full Year 2023            Q4 2019    Full Year 2019

Passenger Fares           148.73          153.91                    135.33       151.09

Onboard                         79.29             82.34                      64.83         67.81

 

As far as some expense categories per passenger per day

Food                             14.19              14.61                      11.17         11.60

Fuel                              23.52              22.40                      15.27         16.73

total operational         153.77             156.64                   131.19        138.26

 

Basically passenger fares per passenger day for this most recent quarter and fiscal year are exceed fares in 2019 and are expected to be increasing in future reporting periods. Onboard spending  is now a little over 22% higher per passenger day then similar periods in 2019.  Clearly CCL lines have been successful in increasing on board spending amounts while  getting fares back to pre-shutdown levels.

 

Expenses are certainly higher with food spend around 25-27% higher than 2019.  However, it is a bit lower than 2022 which most likely indicates that they have been able to rebuild their supply chains.

 

Fuel is up over 30% for 2023 compared to 2019 with Q4 being over 50% higher.

 

Total operational costs are up  17% for Q4 and 13% for the entire 2023 fiscal year compared to 2019.  However total operational costs are down compared to 2022 largely do to better efficiency with supply chains rebuilt and ships sailing at a higher occupancy level.

 

Occupancy was 101% in the most recent quarter, still significantly lower compared to 107.8% is the same quarter in 2019.

 

 

Just to give an idea of the fare increases from last year the 2022 numbers for per passenger per day fares were $123 for Q4 2022 and 128.6 for the year.

[BermudaBound2014]

56 minutes ago, TRLD said:

Certainly, why wouldn't they if it has been successful in the past.....

 

........ without having access to the data that the cruise lines has, the cruise lines that have all of that information available do see value and economic benefit from them or they would not repeat them.

 

Correct. We don't have any data; therefore we have no idea if the $1 deposits have been successful economically. The benefit maybe strategic over economics. Like you said, without having access to the data (specific to HAL) we're shooting in the dark.